In their ongoing battle with the MPAA, the Florida-based file-hosting service Hotfile has suffered a major loss. A federal court has ordered Hotfile to disclose user data, the identities and revenues of their top affiliates, and financial information on the company itself. District Court Judge Adalberto Jordan argued that the MPAA needs this info to prove that Hotfile is promoting and profiting from copyright infringement.

As one of the ten largest file-sharing sites on the Internet, the file-hosting service Hotfile has become a prime target for Hollywood.

Earlier this year, five member companies of the MPAA filed a lawsuit against Hotfile and ever since the parties have been battling in court.

A few months ago the movie studios requested a substantial amount of information from the file-hosting service, including IP addresses of uploaders and downloaders, and the identities and earnings of top affiliates. In addition the MPAA asked for the source code of the site.

Hotfile protested these requests, arguing that some of the information, including the financials, is confidential. Also, the company claimed that handing over user data and detailed information on its top affiliates,would breach privacy law.

District Court Judge Adalberto Jordan reviewed the arguments from both sides and detailed his decision in a recent order, which is mostly negative for Hotfile. Except for the site’s source code, Judge Jordan ordered that Hotfile has to hand over all data requested by the MPAA.

Firstly this means that Hotfile has to disclose details on all files ever uploaded to Hotfile, including the title, number of downloads and the IP-addresses of the uploaders and downloaders.

Hotfile objected to this request because of privacy concerns, and the fact that it would include gathering data on millions of files that are not specific to the case. The judge, however, disagreed and sided with MPAA’s claim that the data is needed to do a proper statistical analysis on how much of Hotfile’s content is infringing.

“To prove this rampant infringement, the movie studios need to do a statistical analysis showing that most of the content uploaded and downloaded on hotfile.com infringes some copyright or another,” the judge writes.

Part of MPAA’s request for user data

In addition to all user data, Hotfile also has to handover detailed information on the site’s top 500 affiliates, including their identities and the payouts made to these persons or companies. In their request for the affiliate data the MPAA has described these persons as potential key-witnesses who could be used to gather further evidence on Hotfile’s operation.

Hotfile initially refused this request because it would be an unnecessary breach of privacy laws, but Judge Jordan concludes that they failed to show why this would be the case.

“Hotfile pays ‘affiliates’ when content that the affiliates uploaded is downloaded by others. The movie studios want information on the top 500 money-making affiliates. This information, the movie studios believe, may show that Hotfile and Mr. Titov profited from direct infringement or induced direct infringement. I agree,” the Judge writes.

The third request by the MPAA that Judge Jordan granted was that for the disclosure of the company’s financial information. Hotfile declined this request claiming that such information is confidential, but the judge concluded that despite the possible confidentiality the financial information is both relevant and necessary.

“Part of the movie studios’ case concerns Hotfile’s and Mr. Titov’s motives for allowing their users and affiliates to infringe copyright law. And Hotfile’s and Mr. Titov’s financial motivation may justify an inference of unlawful intent. Thus, the information is relevant,” the judge writes.

Hotfile has to hand over all the information above to the MPAA by September 12, and future filings will have to show how the MPAA plans to use this new intelligence.

For now, however, it doesn’t appear that the movie studios are going to use any of the user data to pursue legal action against individual uploaders or downloaders who are not affiliates. In previous court filings the MPAA stated that Hotfile could mask the last digits of users’ IP-addresses as long as they would be able to determine the country of the user.

The top affiliates on the other hand are more likely to be dragged into the lawsuit, as the MPAA noted that these persons or companies could be key witnesses. Whether this will indeed be the case has yet to be seen, but its safe to conclude that Hotfile and its top affiliates will be disappointed with the Judge’s decision.